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Lower Q1 GDP weighs on peso

GMA News Online logo GMA News Online 5/18/2017 Sollorano, Vic
MONEY- peso thumbnail © Provided by Mediamerge Corporation MONEY- peso thumbnail

The Philippine peso depreciated against the dollar on Thursday as lower-than-expected first quarter gross domestic product (GDP) data disappointed the market.

The local currency shed 4.5 centavos to close at P49.805:$1 from 49.760 on Wednesday.

"It's a knee-jerk reaction to lower GDP, the risks emanating from below expectations economic growth in the first quarter,' First Grade Finance Inc. Managing Director Astro del Castillo told GMA News Online.

The Philippine Statistics Authority reported the economy grew by 6.4 percent in the first quarter of the year, slower than market expectations of 6.5 to 7.0 percent.

It is also below the government's forecast of 6.5 to 7.5 percent.

Del Castillo noted the latest decision of the Duterte administration to refuse grants from the European Union constitutes risk affecting investor sentiment.

BDO Unibank Inc. chief market strategist Jonathan Ravelas said declines overnight on Wall Street helped weaken the peso.

"It's risk-off following Wall Street's drop. Market still expected to remain range-bound at 49.60-49.90 levels," Ravelas said.

According to a report by Reuters, US stocks were sharply lower after reports of a leaked memo by former FBI chief James Comey caused alarm on Capitol Hill, raising questions about whether President Donald Trump tried to interfere with a federal investigation. — VDS, GMA News


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